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April 22, 2015

FHFA to protect mortgages from 'super-priority' liens

The Federal Housing Finance Agency said Tuesday that it has not consented, and will not consent, to the foreclosure of a mortgage loan backed by Fannie Mae or Freddie Mac when initiated by a homeownership association with a "super-priority" lien to the loan.

Making its case, FHFA quoted Title 12 of the United States Code, which states that while FHFA is conservator of the government-sponsored enterprises, "[no] property of the Agency shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the Agency."

FHFA stated its intent to protect GSE-backed mortgages from HOAs in a December statement. "FHFA has an obligation to protect Fannie Mae's and Freddie Mac's rights, and will aggressively do so by bringing or supporting actions to contest HOA foreclosures that purport to extinguish Enterprise property interests in a manner that contravenes federal law," the agency said Tuesday.

"Consequently, FHFA confirms that it has not consented, and will not consent in the future, to the foreclosure or other extinguishment of any Fannie Mae or Freddie Mac lien or other property interest in connection with HOA foreclosures of super-priority liens," it added.